IN FOCUS

Political Issues

• Slovenian anti-discrimination legislation is aligned with the EU legislation. Slovenia has a Human Rights Ombudsman and an Equal Opportunity Ombudsperson.

• Slovenia will continue to guarantee special, collective rights to the Italian and Hungarian national communities, in accordance with the Constitution (Art. 64) and other legislation based on it.

• Roma community: Slovenia will continue to guarantee special rights to the Roma community, in accordance with the Constitution (Art. 65) and other relevant legislation. Amendments to the Local Government Act, Local Elections Act and Voting Rights Register Act (May 2002) guarantee the Roma community the right to elect their representatives to 20 municipality councils. This provision was in large part implemented already at November 2002 elections and will be fully implemented by the next elections (2006).

• From the institutional point of view, the democratic control of armed forces functions through activities of the legislative, executive and judicial branches of power, and of the President of the Republic.

• Slovenia will continue to ensure a transparent system of national defence, in which the Parliament, through its competent bodies, has an important role.

• In 2002, the Government intensified the information activities and public debate regarding the membership of Slovenia in NATO. The information activities were intensified before the referendum on NATO on 23 March 2003.

• The campaign involved the highest political representatives of the state, high-level government officials, members of Parliament and representatives of academic institutions and NGOs. It was carried out through public debates, publications, a special NATO web-site, a free telephone line (NATOfon), and intensive co-operation with the media. The aim of these activities was to establish as direct a contact with citizens as possible.

• The pre-referendum activities included:
  • active engagement of high political representatives and political parties,
  • new publications (NATO after Prague), as well as continuous information activities on the web site (http://nato.gov.si) and NATOfon,
  • co-operation with the media, in particular electronic, at the national and regional levels, including information supplements to newspapers and magazines, advertisement of information sources where citizens can obtain additional information about various aspects of Slovenia's integration into NATO.

• The Government recognises the democratic right of Slovenian citizens to be well informed on security issues. After the referendum, the Government will continue to provide the public with information about NATO through established mechanisms.

• Fight against organised crime: The Police Strategy for the Fight Against Organised Crime provides the basis for police work for the 2002-2003 period and plans a number of activities (aligning the legislation to the EU acquis, drafting strategic documents, training and education).

• An analysis of organized crime factors will be carried out in the first half of 2003. A police strategy for reducing organized crime will be prepared in 2004.

• The Penal Code will be amended by the end of 2003. It will cover sanctioning of human trafficking, implementation of provisions of the UN Convention Against Transnational Organised Crime (already signed) and its protocols, and it will regulate the status of witnesses and their protection.

• The Government sent a liaison officer to the SECI Regional Crime Centre for Combating Trans-border Crime in Bucharest in November 2002 for a period of six months.

• Fight against corruption: The number of cases of corruption detected in Slovenia annually is relatively low.

• Slovenian anti-corruption legislation is fully in line with the EU legislation. Slovenia passed or amended and implemented the following instruments: Criminal Law Convention of the Council of Europe on Corruption (ratified in 2000), OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (ratified in 2001), Prevention of Money Laundering Act (passed in 2001, amended in 2002), Criminal Liability of Legal Entities Act (adopted in 2002), Public Officials Act and Civil Servants Act (both adopted in 2002) and the Criminal Procedure Act (amended in 2001).

• In 2003, Slovenia will pass or amend the following acts: the Penal Code, the Criminal Procedure Act (to enhance control of financial accounts and the effectiveness of pre-trial procedures), Incompatibility of Holding Public Office with Profitable Activity Act, and Prevention of Corruption Act. Slovenia will also adopt the Anti-Corruption National Strategy.

• The Anti-Corruption National Strategy and the anti-corruption legislation will set the basis for co-ordinated functioning of the public and private sector and the civil society in the field of fighting corruption. The incompatibility of holding public office with profitable activity, receiving gifts by public officials and civil servants and declarations of property by public officials will be regulated more effectively.

• Slovenia will ratify the following international conventions in 2003: UN Convention Against Transnational Organised Crime and protocols, and Civil Law Convention of the Council of Europe on Corruption. It will sign an additional protocol to the Criminal Law Convention of the Council of Europe on Corruption.

• Prevention of money laundering: Prevention of Money Laundering Act provides the basis for the prevention of money laundering and is in line with the EU legislation. In accordance with this act, the Office for Prevention of Money Laundering has been established.

• Public administration reform: The following acts were adopted in 2002 to improve the existing system of public administration: the Public Administration Act (came into force in June 2002), the Inspection Supervisory Act, the Public Agencies Act (both came into force in July 2002), the Civil Servants Act (to be applied as of June 2003), and the Act on the System of Salaries in Public Sector (to be applied as of 1 January 2004). To implement these acts, several implementing regulations, eight government decrees, and eight ministerial rules have been prepared and will be adopted between April and June 2003. In addition, the following acts were adopted in the area of election legislation (EU free movement of workers): the Voting Rights Register Act, the new Political Parties Act, and the Election of Members of the European Parliament from the Republic of Slovenia Act.

• Additional legislative reforms will be included in the Public Institutes Act (to be adopted by mid-2004) and the Public Participation in Decision-making Act (to be submitted for reading in the second half of 2003).

• The programme of E-Administration, introduced in 2000, has been enhanced with interactive and information projects. Several computerised public databases (register, land register, population register) have been partly or completely interconnected and are engaged in the exchange of information. Electronic payment of administrative fees and other administrative procedure expenses with direct debit and credit cards has been introduced. An interactive catalogue has also been drawn up, which features real-life situations in first instance administrative procedures conducted by administrative units.

• The EU's Common Assessment Framework has been implemented since February 2002. The evaluation project has been conducted at local and state administration levels. In 2003 and 2004 the activities will be intensified in the areas of promotion, training, preparation of a benchmark base, and connection to the national award for business excellence.

• Denationalisation: By 1 January 2003, 31,038 cases out of 39,149 total claims, i.e. 79% of all the cases, were concluded. The comprehensive value of the resolved claims is approx. 1.67 billion EUR, and comprises 68.6% of the claimed property.

• In January 2003 the Government adopted a report on the acceleration of denationalisation. The report includes a timetable on dynamics of implementing the denationalisation project. According to the timetable, 25 administrative units or their branches are to conclude the claims by the end of 2003, 36 by the end of 2004, and one by the end of 2005.

• The verification of the implementation of denationalisation set in this timetable began with a report on unsolved cases as of 31 December 2002, and will continue to be verified through quarterly reports.

• Functioning of the judiciary system: In the first six months of 2002 the number of unsolved important matters decreased from 162,113 cases to 147,826, i.e. by 8.8%. The number of unsolved enforcement cases increased from 106,716 cases to 126,098, i.e. by 18 % (as a consequence of a change in statistical reckoning).

• The amendments to the Judicial Service Act, adopted in July 2002, are implemented, aiming at:
  • enabling the Courts to transfer judges from one court to another as needed,
  • increasing the responsibilities of judges for resolving pending cases.

• Relations with Croatia: Slovenia is ready to sign the agreement on the common state boundary that has been agreed upon by both Governments and initialed in July 2001. A Fishing Code of Conduct to regulate the temporary fishing regime in the border area at sea has been adopted, in accordance with the Agreement on Border Traffic and Co-operation. The Code came into force in September 2002 and is extended every three months.

• The National Assembly ratified the Agreement on the Krsko Nuclear Power Plant on 25 February 2003. The Agreement came into force on 11 March 2003.

• The successor states to the former Socialist Federal Republic of Yugoslavia (SFRY) signed the Agreement on Succession Issues in June 2001. The Agreement will come into force 30 days after the Ratification Acts have been adopted in all five Parliaments. Four successor states, with the exception of Croatia, have ratified the Agreement. Slovenia has done so in July 2002.

• Regional co-operation: in 2003 Slovenia holds the chairmanship of:
  • the Quadrilaterale (Croatia, Hungary, Italy, Slovenia). Chairmanship priorities are: fight against organised crime and illegal migrations, Trans- European Corridor V., co-operation between the Adriatic ports, and activities of the Multinational Land Force.
  • the Adriatic-Ionian Initiative; chairmanship priorities are: a network to support small and medium-sized enterprises, tourism, and adoption of a plan of prevention and proceedings in case of accidents in the Adriatic.
  • the Central European Free Trade Area (CEFTA).

• In 2004, Slovenia will hold the presidency of the Central European Initiative.

• Slovenia is also to hold the chairmanship of the Organisation for Security and Co-operation in Europe (OSCE) in 2005.

Economic Issues

• The main medium-term economic policy guidelines with respect to strengthening economic stability in Slovenia include gradual reduction of inflation, gradual elimination of the fiscal deficit, further structural reforms, and increased investment in technology and human capital, which should raise annual GDP growth to a level between 4 and 5%.

• An important factor influencing the policy of inflation reduction in the next few years is the anticipated accession of Slovenia to the EU (1 May 2004), which also requires Slovenia to enter the exchange rate mechanism (ERM2). The Government has adopted a more restrictive administered prices policy and public wages policy and has taken measures to reduce budget spending. The Government aims at reducing the inflation rate to around 4% by the time of Slovenia's entry into the ERM2.

• The deindexation of interest rates, which was initiated for short-term claims and liabilities in mid-2002, will be applied to long-term contracts by the time of Slovenia's accession to the EU and will contribute to reducing inflationary pressures.

• The budget deficit reduction policy and debt management policy will provide for further decreasing the debt growth rate and for maintaining it within a sustainable range.

• Following a very high level of FDI inflows in 2002 (1,950 million EUR), the FDI inflows are expected to be maintained at a level comparable to that of 2001 (562 million EUR), as a result of company purchases. Slovenia will continue to ensure that there are no restrictions on direct or portfolio investment nor discrimination between foreign and domestic investors. In order to attract investments, the Government has amended legislation and simplified procedures for establishing enterprises. Investment activity of Slovenian companies abroad is mainly related to their involvement in the countries of the former Yugoslavia and other transition countries.

• Slovenia has undertaken the obligation to transpose the EU acquis communitaire in the field of competition into national legislation and institutional regulation, which is almost fully implemented. A high degree of harmonisation with EU legislation in financial services area has been achieved in all sub-sectors, including banking, securities market and insurance. In the period of 2003-2004, Slovenia is going to improve the efficiency of supervision institutions and establish a stable ownership structure in formerly socially-owned insurance companies.

• The private sector accounts for approx. 65% of the GDP; the continuation of liberalisation and privatisation processes will result in a sustained increase of its share relative to the GDP.

• Restructuring and privatisation of state-owned companies (large-scale privatisation) have been completed in the industrial sector and are underway in the financial and infrastructure sectors.

• Slovenian Development Corporation (SRD d.d.), founded in 1997 to privatise non-viable enterprises, ceased to operate in 2002. The activities for the promotion of entrepreneurship and strengthening of competitiveness in line with EU rules on state aids will be carried out until 2006 and include: deregulation and reduction of state involvement, implementation and monitoring of horizontal measures of competition policy.

• In labour-intensive industries, the Government implements three specific restructuring programmes, in line with EU rules. There are special financial incentives to stimulate entrepreneurship and competitiveness. In accordance with the Strategy for the Development of Small Businesses, adopted by the Government, a range of activities and measures aimed at improving the business environment for small and medium-sized enterprises are carried out.

• Liberalisation of telecommunications was initiated in 2001 and an independent regulatory agency was established. Electric power market was opened to allow imports in 2003 and a gradual privatisation of producers and distributors is foreseen. The railways will be partially privatised and restructured on the basis of their primary business functions to form three companies.

• The National Programme of Motorway Construction (NPIA) was launched in 1996. The implementation of the NPIA depends on the availability of resources and its completion is anticipated by 2010.

• The Exports of Dual-Use Goods Act was adopted in 2000 with the purpose of preventing illicit trade in or exports of dual-use goods. Control over the production and exports of these goods has been introduced and regulated by this Act. A governmental interagency working group was set up at the end of 2002. It is headed by the Director of Slovenian Intelligence and Security Agency. The working group is responsible for monitoring the control over exports of dual-use goods, co-ordinating the activities of the bodies responsible for the implementation of the legislation, and will analyse and enhance the effectiveness of the system of control of the production and exports of dual-use goods.

• Slovenia is aware of the consequences of illicit trade in arms, explosives and materials that can be used for the production of weapons of mass destruction and for terrorist activity and organised crime. Slovenia devotes special attention to such threats and is adapting its legislation accordingly. At the beginning of 2003, the Government issued the Decree on Permits and Consents relating to Trade in and Production of Military Weapons and Equipment. The decree states the types, conditions and procedures for issuing of trade permits, authorisations for production of military weapons and equipment and the procedure for issuing of permits to business ventures for a specific deal. Slovenia will continue to ensure consistent implementation of internal regulations and respect of international standards and rules, including the EU Code of Conduct on Arms Export (1998).

• To reorganise the Slovenian Army, Slovenia will gradually increase the volume of funds allocated for defence purposes. The funds will be increased from 1.41% of GDP in 2001, and 1.61% in 2003 to 2% of GDP by 2008. This projection of defence expenditure was adopted by the Government in June 2002 and has been taken into account in the preparation of five-year budget memorandum, and has already been implemented following the National Assembly's approval of the 2003 and 2004 budgets.

• After 2008, the funds allocated for defence purposes will be maintained at the level of 2% of GDP. In the second half of the year 2003, the National Assembly is expected to approve the General Long Term Development Plan until 2015, with 2% of GDP projection.

• In the long-term, the following structure of defence expenditure is projected: 50% for personnel, 30% for operations and maintenance and 20% for investment and research and development. This structure is expected to be sustained until 2015.

• Defence sector is funded through the regular MoD Budget within the State Budget and through special Basic Development Programmes Act that provides funds for major equipment and infrastructure.

• The goal of the State Budget and MoD Budget is to achieve a result- oriented budget. The debate has started on adapting the current MoD Budget structure to the results of the defence review and on facilitating the transformation to the PARP methodology structure, starting with the 2005 budget, expected to be prepared in 2003.